Enterprise Value to FCFF (EV/FCFF)
Free Cash Flow to The Firm (FCFF)
Danaher Corp., FCFF calculation
US$ in millions
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
The financial information indicates a generally decreasing trend in both net cash provided by operating activities and free cash flow to the firm (FCFF) over the five-year period. While initial values are strong, a noticeable decline is observed, particularly from 2021 to 2023, with a stabilization in the most recent two years.
- Net Cash from Operations
- Net cash provided by operating activities began at US$8,358 million in 2021 and increased slightly to US$8,519 million in 2022. A significant decrease occurred in 2023, falling to US$6,490 million. This was followed by a modest recovery to US$6,688 million in 2024, and a further decline to US$6,416 million in 2025. The overall trend suggests weakening operational cash generation.
- Free Cash Flow to the Firm (FCFF)
- FCFF mirrored the trend in operating cash flow. Starting at US$7,454 million in 2021, it rose to US$7,678 million in 2022. A substantial reduction was then recorded in 2023, with FCFF decreasing to US$5,447 million. FCFF experienced a slight increase to US$5,619 million in 2024, and then decreased slightly to US$5,574 million in 2025. The relative stability between 2024 and 2025 suggests the decline may be leveling off, but remains considerably lower than the initial values.
The consistent relationship between the two metrics suggests that changes in operating cash flow are the primary driver of changes in FCFF. The decrease in both metrics warrants further investigation to determine the underlying causes, such as changes in revenue, cost structure, working capital management, or capital expenditures. The stabilization in the latest period may indicate that corrective actions are taking effect, or that the factors causing the decline have reached a new equilibrium.
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Interest Paid, Net of Tax
Danaher Corp., interest paid, net of tax calculation
US$ in millions
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
2 2025 Calculation
Interest payments, tax = Interest payments × EITR
= 331 × 15.00% = 50
The analysis reveals a fluctuating pattern in interest payments, net of tax, alongside variations in the effective income tax rate over the five-year period. Interest expense, net of tax, generally decreased from 2021 to 2025, while the effective income tax rate exhibited some volatility.
- Interest Payments, Net of Tax
- Interest payments, net of tax, decreased from US$377 million in 2021 to US$302 million in 2022, representing a decline of approximately 20%. A modest increase to US$328 million was observed in 2023. This was followed by a further decrease to US$310 million in 2024 and continued to US$281 million in 2025. Overall, a downward trend is apparent when considering the beginning and end points of the period, despite intermediate fluctuations.
- Effective Income Tax Rate
- The effective income tax rate experienced a decrease from 16.50% in 2021 to 13.10% in 2022. The rate then increased to 16.30% in 2023 and 16.10% in 2024 before decreasing to 15.00% in 2025. The rate demonstrates variability, but remained within a relatively narrow range of 13.10% to 16.50% throughout the period.
- Relationship between Interest Payments and Effective Income Tax Rate
- The decrease in interest payments, net of tax, from 2021 to 2025 does not appear to be directly correlated with the fluctuations in the effective income tax rate. While the effective income tax rate decreased in 2022 alongside a decrease in net interest expense, the rate increased in 2023 while net interest expense also increased. The final two years show a decreasing net interest expense alongside a decreasing effective income tax rate. Further investigation would be required to determine the underlying drivers of these trends and any potential interdependencies.
In summary, the company experienced a general decline in interest payments, net of tax, over the observed period, accompanied by a fluctuating effective income tax rate. The relationship between these two metrics requires further scrutiny to establish any definitive connections.
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Enterprise Value to FCFF Ratio, Current
Danaher Corp., current EV/FCFF calculation, comparison to benchmarks
| Selected Financial Data (US$ in millions) | |
| Enterprise value (EV) | 148,725) |
| Free cash flow to the firm (FCFF) | 5,574) |
| Valuation Ratio | |
| EV/FCFF | 26.68 |
| Benchmarks | |
| EV/FCFF, Competitors1 | |
| AbbVie Inc. | 22.41 |
| Amgen Inc. | 22.28 |
| Bristol-Myers Squibb Co. | 11.10 |
| Eli Lilly & Co. | 98.70 |
| Gilead Sciences Inc. | 18.48 |
| Johnson & Johnson | 28.89 |
| Merck & Co. Inc. | 24.73 |
| Pfizer Inc. | 18.81 |
| Regeneron Pharmaceuticals Inc. | 20.07 |
| Thermo Fisher Scientific Inc. | 27.21 |
| Vertex Pharmaceuticals Inc. | 33.43 |
| EV/FCFF, Sector | |
| Pharmaceuticals, Biotechnology & Life Sciences | 27.86 |
| EV/FCFF, Industry | |
| Health Care | 26.26 |
Based on: 10-K (reporting date: 2025-12-31).
1 Click competitor name to see calculations.
If the company EV/FCFF is lower then the EV/FCFF of benchmark then company is relatively undervalued.
Otherwise, if the company EV/FCFF is higher then the EV/FCFF of benchmark then company is relatively overvalued.
Enterprise Value to FCFF Ratio, Historical
Danaher Corp., historical EV/FCFF calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Enterprise value (EV)1 | 161,736) | 162,558) | 197,948) | 197,582) | 210,569) | |
| Free cash flow to the firm (FCFF)2 | 5,574) | 5,619) | 5,447) | 7,678) | 7,454) | |
| Valuation Ratio | ||||||
| EV/FCFF3 | 29.01 | 28.93 | 36.34 | 25.74 | 28.25 | |
| Benchmarks | ||||||
| EV/FCFF, Competitors4 | ||||||
| AbbVie Inc. | 23.29 | 20.05 | 14.89 | 12.15 | 13.18 | |
| Amgen Inc. | 23.08 | 15.35 | 22.22 | 16.01 | 15.82 | |
| Bristol-Myers Squibb Co. | 10.84 | 9.94 | 9.14 | 13.87 | 10.52 | |
| Eli Lilly & Co. | 107.04 | 200.96 | 655.43 | 59.17 | 38.39 | |
| Gilead Sciences Inc. | 19.36 | 14.50 | 13.41 | 13.58 | 8.42 | |
| Johnson & Johnson | 28.52 | 18.16 | 19.30 | 23.80 | 21.25 | |
| Merck & Co. Inc. | 25.30 | 13.24 | 37.84 | 19.09 | 23.27 | |
| Pfizer Inc. | 18.08 | 15.33 | 32.24 | 9.15 | 8.40 | |
| Regeneron Pharmaceuticals Inc. | 20.01 | 19.97 | 25.33 | 23.31 | 9.81 | |
| Thermo Fisher Scientific Inc. | 28.42 | 26.13 | 28.85 | 31.61 | 33.14 | |
| Vertex Pharmaceuticals Inc. | 36.94 | — | 29.45 | 16.68 | 22.47 | |
| EV/FCFF, Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | 28.89 | 23.59 | 27.29 | 18.08 | 16.12 | |
| EV/FCFF, Industry | ||||||
| Health Care | 27.34 | 24.05 | 25.98 | 18.66 | 17.80 | |
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
3 2025 Calculation
EV/FCFF = EV ÷ FCFF
= 161,736 ÷ 5,574 = 29.01
4 Click competitor name to see calculations.
The Enterprise Value to Free Cash Flow to the Firm (EV/FCFF) ratio exhibits fluctuations over the observed period. Enterprise Value decreased from 2021 to 2024, then experienced a slight decrease from 2024 to 2025. Free Cash Flow to the Firm also decreased from 2022 to 2023, and remained relatively stable from 2023 to 2025.
- Enterprise Value
- Enterprise Value began at US$210,569 million in 2021. A decline was noted in 2022 to US$197,582 million, followed by a marginal increase to US$197,948 million in 2023. A more substantial decrease occurred in 2024, reaching US$162,558 million, and continued to US$161,736 million in 2025.
- Free Cash Flow to the Firm
- Free Cash Flow to the Firm was US$7,454 million in 2021 and increased to US$7,678 million in 2022. A decrease to US$5,447 million was observed in 2023. The value then rose slightly to US$5,619 million in 2024 and remained relatively consistent at US$5,574 million in 2025.
- EV/FCFF Ratio
- The EV/FCFF ratio was 28.25 in 2021, decreasing to 25.74 in 2022. An increase to 36.34 was recorded in 2023, likely due to the decrease in FCFF. The ratio then decreased to 28.93 in 2024, and remained stable at 29.01 in 2025. The ratio’s movement suggests a changing relationship between the company’s enterprise value and its ability to generate free cash flow.
The increase in the EV/FCFF ratio in 2023 warrants further investigation, as it indicates the enterprise value grew relative to the free cash flow generated. The subsequent decrease in 2024 and stabilization in 2025 suggest a partial correction, but the ratio remains elevated compared to the 2021 and 2022 levels.
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